(b) The Legislature finds that the business of insurance
involves many transactions of numerous types that have potential
for fraud and other illegal activities. This article is intended
to permit use of the expertise of the commissioner to investigate
and help prosecute insurance fraud and other crimes related to the
business of insurance more effectively, and to assist and receive
assistance from state, local and federal law-enforcement and
regulatory agencies in enforcing laws prohibiting crimes relating
to the business of insurance.

WVC 33 - 41 - 2
§33-41-2. Definitions.

As used in this article:

(1) "Benefits" mean money payments, goods, services or other
thing of value paid in response to a claim filed with an insurer
based upon a policy of insurance;

(2) "Business of insurance" means the writing of insurance,
including the writing of workers' compensation insurance under the
provisions of chapter twenty-three of this code, self-insurance by
an employer or employer group for workers' compensation risk
including the risk of catastrophic injuries under the provisions of
chapter twenty-three of this code or the reinsuring of risks by an
insurer, including acts necessary or incidental to writing
insurance or reinsuring risks and the activities of persons who act
as or are officers, directors, agents or employees of insurers, or
who are other persons authorized to act on their behalf;

(3) "Claim" means an application or request for payment or
benefits provided under the terms of a policy of insurance;

(4) "Commissioner" means the Insurance Commissioner of West
Virginia or his or her designee;

(6) "Insurance" means a contract or arrangement in which a
person undertakes to:

(A) Pay or indemnify another person as to loss from certain
contingencies called "risks", including through reinsurance;

(B) Pay or grant a specified amount or determinable benefit to
another person in connection with ascertainable risk contingencies;

(C) Pay an annuity to another person;

(D) Act as surety; or

(E) Self-insurance for workers' compensation risk including
the risk of catastrophic injuries under the provisions of chapter
twenty-three of this code.

(7) "Insurer" means a person entering into arrangements or
contracts of insurance or reinsurance. Insurer includes, but is
not limited to, any domestic or foreign stock company, mutual
company, mutual protective association, farmers' mutual fire
companies, fraternal benefit society, reciprocal or interinsurance
exchange, nonprofit medical care corporation, nonprofit health care
corporation, nonprofit hospital service association, nonprofit
dental care corporation, health maintenance organization, captive
insurance company, risk retention group or other insurer,
regardless of the type of coverage written, including the writing
of workers' compensation insurance or self insurance under the
provisions of chapter twenty-three of this code, benefits provided
or guarantees made by each. A person is an insurer regardless of whether the person is acting in violation of laws requiring a
certificate of authority or regardless of whether the person denies
being an insurer;

(8) "Person" means an individual, a corporation, a limited
liability company, a partnership, an association, a joint stock
company, a trust, trustees, an unincorporated organization, or any
similar business entity or any combination of the foregoing.
"Person" also includes hospital service corporations, medical
service corporations and dental service corporations as defined in
article twenty-four of this chapter, health care corporations as
defined in article twenty-five of this chapter, or a health
maintenance organization organized pursuant to article
twenty-five-a of this chapter;

(9) "Policy" means an individual or group policy, group
certificate, contract or arrangement of insurance or reinsurance,
coverage by a self-insured employer or employer group for its
workers' compensation risk including its risk of catastrophic
injuries or reinsurance, affecting the rights of a resident of this
state or bearing a reasonable relation to this state, regardless of
whether delivered or issued for delivery in this state;

(10) "Reinsurance" means a contract, binder of coverage
(including placement slip) or arrangement under which an insurer
procures insurance for itself in another insurer as to all or part
of an insurance risk of the originating insurer;

(11) "Statement" means any written or oral representation made to any person, insurer or authorized agency. A statement includes,
but is not limited to, any oral report or representation; any
insurance application, policy, notice or statement; any proof of
loss, bill of lading, receipt for payment, invoice, account,
estimate of property damages, or other evidence of loss, injury or
expense; any bill for services, diagnosis, prescription, hospital
or doctor record, X-ray, test result or other evidence of
treatment, services or expense; and any application, report,
actuarial study, rate request or other document submitted or
required to be submitted to any authorized agency. A statement
also includes any written or oral representation recorded by
electronic or other media; and

(12) "Unit" means the insurance fraud unit established
pursuant to the provisions of this article acting collectively or
by its duly authorized representatives.

WVC 33 - 41 - 3
§33-41-3. Fraud warning authorized; statement required of
nonadmitted insurers.
(a) Claims forms and applications for insurance, regardless of
the form of transmission, may contain the following warning or a
substantially similar caveat:

"Any person who knowingly presents a false or fraudulent claim
for payment of a loss or benefit or knowingly presents false
information in an application for insurance is guilty of a crime
and may be subject to fines and confinement in prison."

(b) The lack of a warning as authorized by the provisions of
subsection (a) of this section does not constitute a defense in any
prosecution for a fraudulent or illegal act nor shall it constitute
the basis for any type of civil cause of action.

(c) Policies issued by nonadmitted insurers pursuant to
article twelve-c of this chapter shall contain a statement
disclosing the status of the insurer to do business in the state
where the policy is delivered or issued for delivery or the state
where coverage is in force. The requirement of this subsection may
be satisfied by a disclosure specifically required by section five,
article twelve-c of this chapter; section nine, article thirty-two
of this chapter; and section eighteen, article thirty-two of this
chapter.

WVC 33 - 41 - 4
§33-41-4. Authority of the commissioner; use of special assistant
prosecutors.
(a) The commissioner may investigate suspected criminal acts
relating to the business of insurance as authorized by the
provisions of this article.

(b) If the prosecuting attorney of the county in which a
criminal violation relating to the business of insurance occurs
determines that his or her office is unable to take appropriate
action, he or she may petition the appropriate circuit court for
the appointment of a special prosecutor or special assistant
prosecutor from the West Virginia Prosecuting Attorney Institute
pursuant to the provisions of section six, article four, chapter
seven of this code. Notwithstanding the provisions of that
section, attorneys employed by the commissioner and assigned to the
insurance fraud unit created by the provisions of section eight of
this article may prosecute or assist in the prosecution of
violations of the criminal laws of this state related to the
business of insurance and may act as special prosecutors or special
assistant prosecutors in those cases if assistance is sought by the
prosecuting attorney or special prosecutor assigned by the
institute to prosecute those matters.

(c) Funds allocated for insurance fraud prevention may be
dispersed by the commissioner, at his or her discretion, for the
purpose of insurance fraud enforcement as authorized by the
provisions of this code.

(d) The Insurance Fraud Unit authorized by the provisions of
section eight of this article may assist federal law-enforcement
agencies, the West Virginia state police, the state fire marshal,
municipal police departments and the sheriffs of the counties in
West Virginia in investigating crimes related to the business of
insurance.

(e) The commissioner may conduct public outreach, education,
and awareness programs on the costs of insurance fraud to the
public.

WVC 33 - 41 - 5
§33-41-5. Reporting of insurance fraud or criminal offenses
otherwise related to the business of insurance.
(a) A person engaged in the business of insurance having
knowledge or a reasonable belief that fraud or another crime
related to the business of insurance is being, will be or has been
committed shall provide to the commissioner the information
required by, and in a manner prescribed by, the commissioner.

(b) The commissioner may prescribe a reporting form to
facilitate reporting of possible fraud or other offenses related to
the business of insurance for use by persons other than those
persons referred to in subsection (a) of this section.

WVC 33 - 41 - 6
§33-41-6. Immunity from liability.
(a) There shall be no civil liability imposed on and no cause
of action shall arise from a person's furnishing information
concerning suspected or anticipated fraud relating to the business
of insurance, if the information is provided to or received from:

(1) The commissioner or the commissioner's employees, agents
or representatives;

(2) Federal, state, or local law-enforcement or regulatory
officials or their employees, agents or representatives;

(3) A person involved in the prevention and detection of
insurance fraud or that person's agents, employees or
representatives; or

(4) The national association of insurance commissioners or its
employees, agents or representatives.

(b) The provisions of subsection (a) of this section are not
applicable to materially incorrect statements made maliciously or
fraudulently by a person designated a mandated reporter pursuant to
the provisions of subsection (a), section five of this article or
made in reckless disregard to the truth or falsity of the statement
by those not mandated to report. In an action brought against a
person for filing a report or furnishing other information
concerning an alleged insurance fraud, the party bringing the
action shall plead with specificity any facts supporting the
allegation that subsection (a) of this section does not apply
because the person filing the report or furnishing the incorrect information did so maliciously in the case of a mandated reporter
or in the case of a person not designated a mandated reporter, in
reckless disregard for the truth or falsity of the statement.

(c) Nothing in this article shall be construed to limit,
abrogate or modify existing statutes or case law applicable to the
duties or liabilities of insurers regarding bad faith or unfair
trade practices.

(d) This section does not abrogate or modify common law or
statutory privileges or immunities.

WVC 33 - 41 - 7
§33-41-7. Confidentiality.
(a) Documents, materials or other information in the
possession or control of the office of the insurance commissioner
that are provided pursuant to section six of this article or
obtained by the commissioner in an investigation of alleged
fraudulent acts related to the business of insurance shall be
confidential by law and privileged, shall not be subject to the
provisions of chapter twenty-nine-b of this code, shall not be open
to public inspection, shall not be subject to subpoena, and shall
not be subject to discovery or admissible in evidence in any
private civil action. The commissioner may use the documents,
materials or other information in the furtherance of any regulatory
or legal action brought as a part of the commissioner's official
duties. The commissioner may use the documents, materials or other
information if they are required for evidence in criminal
proceedings or other action by the state or federal government and
in such context may be discoverable as ordered by a court of
competent jurisdiction exercising its discretion.

(b) Neither the commissioner nor any person who receives
documents, materials or other information while acting under the
authority of the commissioner may be permitted or required to
testify in any private civil action concerning any confidential
documents, materials or information subject to subsection (a) of
this section except as ordered by a court of competent
jurisdiction.

(c) In order to assist in the performance of the
commissioner's duties, the commissioner:

(1) May share documents, materials or other information,
including the confidential and privileged documents, materials or
information subject to subsection (a) of this section with other
state, federal and international regulatory agencies, with the
national association of insurance commissioners and its affiliates
and subsidiaries, and with local, state, federal and international
law-enforcement authorities, provided that the recipient agrees to
maintain the confidentiality and privileged status of the document,
material or other information;

(2) May receive documents, materials or information, including
otherwise confidential and privileged documents, materials or
information, from the national association of insurance
commissioners and its affiliates and subsidiaries, and from
regulatory and law-enforcement officers of other foreign or
domestic jurisdictions, and shall maintain as confidential or
privileged any document, material or information received with
notice or the understanding that it is confidential or privileged
under the laws of the jurisdiction that is the source of the
document, material or information; and

(3) May enter into agreements governing sharing and use of
information including the furtherance of any regulatory or legal
action brought as part of the recipient's official duties.

(d) No waiver of any applicable privilege or claim of confidentiality in the documents, materials or information shall
occur as a result of disclosure to the commissioner under this
section or as a result of sharing as authorized in subsection (c)
of this section.

(e) Nothing in this section shall prohibit the commissioner
from providing information to or receiving information from any
local, state, federal or international law-enforcement authorities,
including any prosecuting authority; or from complying with
subpoenas or other lawful process in criminal actions; or as may
otherwise be provided in this article.

(f) Nothing in this article may be construed to abrogate or
limit the attorney-client or work product privileges existing at
common law or established by statute or court rule.

WVC 33 - 41 - 8
§33-41-8. Creation of insurance fraud unit; purpose; duties;
personnel qualifications.
(a) There is established the West Virginia Insurance Fraud
Unit within the office of the Insurance Commissioner of West
Virginia. The commissioner may employ full-time supervisory, legal
and investigative personnel for the unit who shall be qualified by
training and experience in the areas of detection, investigation or
prosecution of fraud within and against the insurance industry to
perform the duties of their positions. The director of the fraud
unit is a full-time position and shall be appointed by the
commissioner and serve at his or her will and pleasure. The
commissioner shall provide office space, equipment, supplies,
clerical and other staff that is necessary for the unit to carry
out its duties and responsibilities under this article.

(b) The fraud unit may in its discretion:

(1) Initiate inquiries and conduct investigations when the
unit has cause to believe violations of any of the following
provisions of this code relating to the business of insurance have
been or are being committed: This chapter; chapter twenty-three of
this code; article three, chapter sixty-one of this code; and
section five, article four of said chapter. Notwithstanding any
provision of this code to the contrary, the fraud unit may, with
the agreement of the Director of the Public Employees Insurance
Agency, conduct investigations related to possible fraud under
article sixteen, chapter five of this code;

(2) Review reports or complaints of alleged fraud related to
the business of insurance activities from federal, state and local
law-enforcement and regulatory agencies, persons engaged in the
business of insurance and the general public to determine whether
the reports require further investigation; and

(3) Conduct independent examinations of alleged fraudulent
activity related to the business of insurance and undertake
independent studies to determine the extent of fraudulent insurance
acts.

(c) The insurance fraud unit may:

(1) Employ and train personnel to achieve the purposes of this
article and to employ legal counsel, investigators, auditors and
clerical support personnel and other personnel as the commissioner
determines necessary from time to time to accomplish the purposes
of this article;

(4) Share records and evidence with federal, state or local
law-enforcement or regulatory agencies, and enter into interagency
agreements. For purposes of carrying out investigations under this
article, the unit shall be deemed a criminal justice agency under
all federal and state laws and regulations and as such shall have
access to any information that is available to other criminal
justice agencies concerning violations of the insurance laws of West Virginia or related criminal laws;

(5) Make criminal referrals to the county prosecutors;

(6) Conduct investigations outside this state. If the
information the insurance fraud unit seeks to obtain is located
outside this state, the person from whom the information is sought
may make the information available to the insurance fraud unit to
examine at the place where the information is located. The
insurance fraud unit may designate representatives, including
officials of the state in which the matter is located, to inspect
the information on behalf of the insurance fraud unit, and the
insurance fraud unit may respond to similar requests from officials
of other states;

(7) The insurance fraud unit may initiate investigations and
participate in the development of and, if necessary, the
prosecution of any health care provider, including a provider of
rehabilitation services, suspected of fraudulent activity related
to the business of insurance;

(8) Specific personnel, designated by the commissioner, shall
be permitted to operate vehicles owned or leased for the state
displaying Class A registration plates;

(9) Notwithstanding any provision of this code to the
contrary, specific personnel designated by the commissioner may
carry firearms in the course of their official duties after meeting
specialized qualifications established by the Governor's Committee
on Crime, Delinquency and Correction, which shall include the successful completion of handgun training provided to
law-enforcement officers by the West Virginia State Police:
Provided, That nothing in this subsection shall be construed to
include any person designated by the commissioner as a
law-enforcement officer as that term is defined by the provisions
of section one, article twenty-nine, chapter thirty of this code;
and

(10) The insurance fraud unit shall not be subject to the
provisions of article nine-a, chapter six of this code and the
investigations conducted by the insurance fraud unit and the
materials placed in the files of the unit as a result of any such
investigation are exempt from public disclosure under the
provisions of chapter twenty-nine-b of this code.

(d) The insurance fraud unit shall perform other duties as may
be assigned to it by the commissioner.

WVC 33 - 41 - 8 A
§33-41-8a. Fingerprinting and background check for applicants for
employment with fraud unit.
(a) The Commissioner shall require any applicant for
employment with the fraud unit to be fingerprinted. The
Commissioner is authorized to conduct a criminal records check
through the Criminal Identification Bureau of the West Virginia
State Police and a national criminal history check through the
Federal Bureau of Investigation. The results of any criminal
records or criminal history check shall be sent to the
Commissioner. The West Virginia State Police may exchange this
fingerprint data with the Federal Bureau of Investigation.

(b) The Director shall not disclose information obtained
pursuant to subsection (a) of this section except for purposes
directly related to the employment of the applicant.

WVC 33 - 41 - 8 B
§33-41-8b. Fraud investigators may present complaint directly to
magistrate.
Notwithstanding any other provision of this code to the
contrary, any person authorized under this article to initiate and
conduct investigations may submit complaints directly to a
magistrate after review and approval by the prosecuting attorney,
if the complaint is related to the business of insurance and may be
prosecuted as a criminal violation under this chapter; chapter
twenty-three of this code; article three, chapter sixty-one of this
code; or section five, article four of said chapter.

The complaint shall be in the form of a written statement of
the essential facts constituting the offense charged. The
complaint shall be presented to and sworn before a magistrate in
the county where the offense is alleged to have occurred.

If it appears from the complaint, or from an affidavit or
affidavits filed with the complaint, that there is probable cause
to believe that an offense has been committed and that the
defendant committed it, a warrant for the arrest of the defendant
shall be issued to any officer authorized by law to arrest persons
charged with offenses against the state.

(1) Preempt the authority or relieve the duty of other
law-enforcement or regulatory agencies to investigate, examine and
prosecute suspected violations of law;

(2) Prevent or prohibit a person from disclosing voluntarily
information concerning insurance fraud to a law-enforcement or
regulatory agency other than the insurance fraud unit; or

(3) Limit the powers granted elsewhere by the laws of this
state to the commissioner or his or her agents to investigate and
examine possible violations of law and to take appropriate action
against violators of law.

WVC 33 - 41 - 10
§33-41-10. Rules.
The insurance commissioner shall, pursuant to the provisions
of article three, chapter twenty-nine-a of this code, promulgate
such legislative rules as are necessary or proper to carry out the
purposes of this article.

WVC 33 - 41 - 11
§33-41-11. Fraudulent claims to insurance companies.
(a) Any person who knowingly and willfully and with intent to
defraud submits a materially false statement in support of a claim
for insurance benefits or payment pursuant to a policy of insurance
or who conspires to do so is guilty of a crime and is subject to
the penalties set forth in the provisions of this section.

(b) Any person who commits a violation of the provisions of
subsection (a) of this section where the benefit sought is one
thousand dollars or more in value is guilty of a felony and, upon
conviction thereof, shall be imprisoned in a correctional facility
for not less than one nor more than ten years, fined not more than
ten thousand dollars, or both, or in the discretion of the circuit
court confined in jail for not more than one year and fined not
more than ten thousand dollars, or both.

(c) Any person who commits a violation of the provisions of
subsection (a) of this section where the benefit sought is less
than one thousand dollars in value is guilty of a misdemeanor and,
upon conviction thereof, shall be confined in jail for not more
than one year, fined not more than two thousand five hundred
dollars, or both.

(d) Any person convicted of a violation of this section is
subject to the restitution provisions of article eleven-a, chapter
sixty-one of this code.

(e) In addition to the foregoing provisions, the offenses
enumerated in sections twenty-four-e through twenty-four-h, inclusive, article three, chapter sixty-one of this code are
applicable to matters concerning workers' compensation insurance.

(f) The circuit court may award to the unit or other
law-enforcement agency investigating a violation of this section or
other criminal offense related to the business of insurance its
cost of investigation.

WVC 33 - 41 - 12
§33-41-12. Civil penalties; injunctive relief; employment
disqualification.
A person or entity engaged in the business of insurance or a
person or entity making a claim against an insurer who violates any
provision of this article may be subject to the following:

(1) Where applicable, suspension or revocation of license or
certificate of authority or a civil penalty of up to ten thousand
dollars per violation, or where applicable, both. Suspension or
revocation of license or certificate of authority or imposition of
civil penalties may be pursuant to an order of the commissioner
issued pursuant to the provisions of section thirteen, article two
of this chapter. The commissioner's order may require a person
found to be in violation of this article to make reasonable
restitution to persons aggrieved by violations of this article.
The commissioner may assess a person sanctioned pursuant to the
provisions of this section the cost of investigation;

(2) Notwithstanding any other provision of law, a civil
penalty imposed pursuant to the provisions of this section is
mandatory and not subject to suspension;

(3) A person convicted of a felony violation law reasonably
related to the business of insurance shall be disqualified from
engaging in the business of insurance; and

(4) The commissioner may apply for a temporary or permanent
injunction in any appropriate circuit court of this state seeking
to enjoin and restrain a person from violating or continuing to violate the provisions of this article or rule promulgated under
this article, notwithstanding the existence of other remedies at
law. The circuit court shall have jurisdiction of the proceeding
and have the power to make and enter an order or judgment awarding
temporary or permanent injunctive relief restraining any person
from violating or continuing to violate any provision of this
article or rule promulgated under the article as in its judgment is
proper.

Note: WV Code updated with legislation passed through the 2016 Regular Session
The West Virginia Code Online is an unofficial copy of the annotated WV Code, provided as a convenience. It has NOT been edited for publication, and is not in any way official or authoritative.